The steady state level of protein tyrosine phosphorylation is dependent upon the relative activities of protein tyrosine phosphatases (PTPs) and protein tyrosine kinases. Regulation of PTP activity constitutes an important mechanism for controlling cellular functions which are mediated by protein tyrosine phosphorylation such as growth and development. Despite recent progress in identifying new PTPs, relatively little is known about their substrates, regulation, and cellular functions. The broad objective of these proposed studies is to elucidate the regulatory mechanisms that control the biological activities of PTPs. We will investigate the function and regulation of two nonreceptor enzymes, the T-cell PTP and a distinct baculoviral PTP. The substrate preference and intracellular localization of the T-cell PTP are regulated by its C- terminal domain. Using in vitro mutagenesis, we will determine the location of specific sites within the C-terminal domain that act to regulate substrate specificity. Immunofluorescence will be used to determine the precise intracellular site where the T-cell PTP is localized. Mutagenesis of a hydrophobic, C-terminal segment will be used to determine whether it is responsible for localization of the enzyme. We have identified a PTP (BVP)that is encoded by a baculovirus, Autographa californica. BVP and two cellular homologs comprise a new subfamily of enzymes. We will investigate the function, mechanism of regulation, and substrates of the BVP by analyzing its role in viral function. It is important to determine whether mammalian forms of this subfamily exist and if so, to define their role in controlling tyrosine phosphorylation. We have evidence for the existence of a human homolog and will isolate a cDNA clone encoding it so that it can be expressed and characterized. Aberrant tyrosine phosphorylation resulting from the unregulated activity of oncogenic tyrosine kinases is thought to be an important event leading to cellular transformation. Knowledge of PTP regulation is crucial to understanding how the delicate balance between protein tyrosine kinases and PTPs is maintained during both oncogenesis and normal cell growth. Information gained about the function and regulation of PTPs may lead to the development of methods for manipulating the level of tyrosine phosphorylation that may have application in research and treatment of diseases such as cancer.